IAM programs should empower digital transformation, but organisations are at risk of being held back by mistakes from the past.

Digital transformation is rapidly taking over boardroom agendas and giving businesses the tremendous challenge of reevaluating the way they operate. Many will need to rethink which markets to compete in and how to structure their business to stay competitive as we go through what the World Economic Forum is calling, the Fourth Industrial Revolution.

Today, if we need to manage our personal finances, our go-to place (and right now our only choice) is the bank where we once decided to deposit our funds - that’s about to change as European regulators aim to create more open and accessible markets. And, in the example of retail banking, the EU aims to achieve this by introducing a revised version of the Payment Service Directive (PSD2). Its intention is to eliminate the monopoly that banks have on their customers’ accounts and will allow consumers to use third-party services to manage their finances. Without going into the details of this specific directive, banks will soon be competing with players from different markets. Consumers may have the option to use Facebook or Amazon to manage their finances. And these players will have the opportunity to disrupt the financial market sector by introducing new types of service, using their own platforms and data.


Disruptions like these are not unique to the financial industry. Many people won’t remember the last time they called a taxi but may have been in an Uber during the past month. They may even have been picked up in a Tesla, a company that has shaken up the automobile industry. The irony is that traditional organisations are now weighed down by the very structures that facilitated their success. Transforming these legacies means a redesign of the fundamental components of their business and a rethink of their operating models and infrastructures - just to stay competitive. Digital disruption is here and, in order to survive, organisations will need to remain agile as they transform.

Regulatory Compliance

Another major force that comes into play is regulation. Regulators often drive disruption – as in the PSD2 example – but they also set the boundaries in which digital transformations are allowed to take place. Regulations such as the General Data Protection Regulation (GDPR) are forcing organisations across all industries to demonstrate that they are in control of their customer data, digital identities and access levels. When these fundamental controls are not implemented in a way that supports an agile way of working, they can impair and threaten the transformation process. And this is exactly where digital transformation hits the domain of identity and access management (IAM).

The IAM beast

Traditional IAM projects are notorious for the amount of time and budget they consume. They are massive projects and often fail to deliver real business value – certainly not within the first year or so. But this perception comes from the approach that was taken during the early adoption of IAM in the financial industry. One of the major problems was that, more often than not, IAM software was customised to facilitate complex processes. That’s approaching the challenge the wrong way around - the process should have been simplified instead of customising the software.

The result is the creation of an uncontrollable beast that needs an increasing amount of feeding – on a diet of people, time and money. This beast is now creating a major problem, adding to the legacy issues that hold customers back from successfully transforming their business in a compliant way.

Slaying the beast

There are some hard choices to make, both for organisations that are heavily invested in legacy solutions or organisations that are facing their first IAM project. Legacy IAM choices must be re-evaluated. Companies that have made the hard choice to kill the beast and start over with a fresh approach have made tremendous progress in their transformation process. By getting rid of their legacy IAM solution they put themselves back into the driving seat for the first time in years. It’s no longer the IAM beast that is driving them. This enables the organisation to redesign their IAM approach in an agile way with the future in mind.

Organisations that are new to IAM have the luxury of a blank canvas, but this can be more challenging due to a lack of experience and knowledge. That’s why it’s crucial to take a business-centric approach and build the right partnership to create a platform that will support the digital transformation and beyond.

Responsibility also lies with the technology vendors. It’s no big secret that software licences and maintenance subscriptions are the critical financial metrics of a software company. But the focus should be on customer lifetime value. By helping customers build a strong foundation for their transformation, sustainable relationships are formed that will eventually boost revenue and shareholder value. Every approach with a customer must be focused on delivering business value from the start and delivering projects that are designed to do so. Standard out-of-the-box functionality should be the default and customisation projects consigned to the past. Alongside this, vendors should focus on building ecosystems that help customers shape their identity strategies to be the foundation for digital transformation.


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